Whitbread Net Up; Cadbury, Burberry Sales Rise

123jump.com Staff
14 Oct, 2008
New York City

Whitbread, the hotel and restaurant group revenue in the first half rose 12% to

[R]4:30PM London – Whitbread PLC revenues rose 12.6% and net profit climbed 24%. Burberry Group dropped 10% at closed after it offered weak outlook and cited rising inventories in call to investors.[/R]

Whitbread PLC, the hotel and restaurant group said first-half revenues rose 12.6% to £682.2 million from £605.8 million a year earlier. Net profit in the first-half climbed 24% to £123.3 million or 49.89 pence per diluted share compared to net profit of £99.4 million, a year earlier.

Whitbread PLC, in the last one year traded as high as 1,791 pence in October 2007 and as low as 875 pence in October 2008. Based on the Friday’s trading closing price the company has a market cap of £1.75 billion.

Burberry Group Plc dropped 10% or 33.25 pence to 288.75 after it offered a weaker than expected outlook.

The luxury apparel and accessories retailer first half sales rose 13% to £539 million and in the second quarter increased 16% from a year ago to £328 million.

The retail segment revenue in the first half increased 21% or 14% on constant currency basis and comparable same store sales rose 3.4%. Wholesale revenue in the period rose 15% with strength in North America, emerging markets and Europe excluding Spain. Licensing revenue declined 3%. Total sales in Spain in the first half were down 20% on weak consumer confidence.

The company anticipates retail space in the second half to rise 12% from a year ago.

The company sold fewer merchandise at full price impacting gross margin but operating margins were not affected with tighter control on discretionary spending. Inventory at the end of the September was £60 million compared to £269 million at the end of March.

Retail sales which are 45% of total sales rose 21% or 14% on constant currency. Retail sales rose 21% to £245 million from a year ago and gained 23% to £130 million in the second quarter.

Of the growth 10.7% was from new retail space and 3.4% on same store sales rise in the period. The same store sales in the first quarter were up 4.5% and in the second quarter were up 2.6%.

Wholesales revenue rose 15% in the first half on the back of more than 20% gains in Europe and North America. Wholesale revenues in emerging markets surged over 50% with a rise in China, Russia, Eastern Europe and Middle East.

The company offered flat outlook for the wholesale revenue and in the second half expect retail space to increase 12%. Spain retail sales are expected to decline more than 20%. For the full year the company guided licensing revenue in Japan to be “slightly down” on soft demand in Japan and lower manufacturing of few global license products.

Cadbury reported third quarter revenue rise of 6% and in the first nine months revenue rose 7%. Emerging markets delivered double digit revenue rise. Revenues in the Americas rose 7% and the company plans to announce 8% gum price increase in the fourth quarter in the U.S.

The company generates more than 80% of revenues from markets outside of U.K. and the company estimates that the recent fall in pound against the euro and American and Australian dollars will help revenues to rise 7% for the year and profit on constant currency to rise 12%.

The company anticipates cocoa prices to rise between 5% and 6% in 2008 and further increase between 6% and 8% in 2009. The company left its guidance for the annual revenue and earnings unchanged from the previous estimate in July.